Natural Gas Price Forecast – Natural Gas Markets Drift Lower
Natural gas markets have gapped lower to kick off the trading week on Monday, breaking down below the $2.60 level initially. All things being equal, I think that the market will continue to have sellers jumping into the market and pushing natural gas lower due to the fact that demand will almost certainly be dropping as temperatures will rise over the course of the next few months, thereby eliminating a certain amount of demand.
NATGAS Video 19.01.21
The 200 day EMA underneath is at the $2.48 level, and underneath there you have the $2.40 level as support as well. At this point in time, I think that the market still as one you want to be fading any signs of strength, especially near the $2.80 level. Above there, the $3.00 level would be even more resistive as it is a large, round, psychologically significant figure and of course an area that has a small gap at it. I have no interest in trying to go long of this market, and quite frankly do not even have a scenario where we would be breaking above the $3.00 level.
As we head into the spring months, people will be looking at the natural gas oversupply as a major issue going forward, as has been the case for quite some time. Ultimately, this is a market that will find plenty of reasons to go lower, if for no other reason than lack of demand but the oversupply of natural gas is a structural one that should continue to cause major issues. The market breaking down below the $2.25 level would kick off a move towards the $2.00 level, which is what I think the longer-term target will be.
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This article was originally posted on FX Empire
